Top 16 Deeply Undervalued, Highly Profitable Stocks

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Includes: CBI, CEVA, CMCSA, COF, CRR, DRQ, ENIA, FLS, FNFG, GMCR, JOY, ORBK, PFS, RSTI, TS, YPF
by: Kapitall

Looking for potentially undervalued stocks?

To help you find ideas, we scanned over 4200 stocks to identify the ones trading at the deepest discounts to analyst target prices (which we used as a proxy for fair value).

Of course, analysts ratings tend to be inflated most of the time, so we used the most pessimistic analyst target price as the benchmark for our analysis.

In addition, we only focused on companies that have more than 5 analyst target prices (to make sure we only focus on companies that have decent analyst coverage).

To further refine the quality of our list, we collected profitability data, and identified the final list of companies that have reported higher than average profit margins over the trailing twelve months (NYSE:TTM).

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.


Wall Street analysts seem to think these stocks offer great upside. Considering their profitability track record--do you agree?

List sorted by the potential upside from current prices to the lowest analyst target price.

1. YPF S.A. (NYSE:YPF): Engages in the exploration, development, and production of crude oil, natural gas, and liquefied petroleum gas (NYSE:LPG) in Argentina. Of the 9 analysts that have set a target price on the stock, the lowest price target stands at $50.0. This implies an upside of 34.37% from current levels around $37.21. TTM gross margin at 38.25% vs. industry average at 32.33%. TTM operating margin at 17.36% vs. industry average at 12.52%. TTM pretax margin at 16.9% vs. industry average at 13.61%.

2. Joy Global, Inc. (JOYG): Engages in the manufacture and servicing of mining equipment for the extraction coal, copper, iron ore, oil sands, and other minerals worldwide. Of the 14 analysts that have set a target price on the stock, the lowest price target stands at $93.0. This implies an upside of 34.16% from current levels around $69.32. TTM gross margin at 35.75% vs. industry average at 32.59%. TTM operating margin at 20.72% vs. industry average at 12.64%. TTM pretax margin at 20.21% vs. industry average at 11.%.

3. Chicago Bridge & Iron Company N.V. (NYSE:CBI): Provides engineering, procurement, and construction (NYSE:EPC) solutions, as well as process technologies for the energy infrastructure projects. Of the 15 analysts that have set a target price on the stock, the lowest price target stands at $40.0. This implies an upside of 34.09% from current levels around $29.83. TTM gross margin at 14.65% vs. industry average at 12.06%. TTM operating margin at 7.9% vs. industry average at 5.1%. TTM pretax margin at 8.12% vs. industry average at 4.33%.

4. Orbotech Ltd. (NASDAQ:ORBK): Engages in the design, development, manufacture, marketing, and service of yield-enhancing and production solutions for specialized applications in the supply chain of the electronics industry. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $13.0. This implies an upside of 33.88% from current levels around $9.71. TTM gross margin at 40.45% vs. industry average at 35.91%. TTM operating margin at 12.32% vs. industry average at 8.88%. TTM pretax margin at 11.15% vs. industry average at 9.76%.

5. Rofin-Sinar Technologies Inc. (NASDAQ:RSTI): Designs, develops, engineers, makes, and markets industrial lasers and supplies used for material-processing applications worldwide. Of the 9 analysts that have set a target price on the stock, the lowest price target stands at $28.0. This implies an upside of 33.27% from current levels around $21.01. TTM gross margin at 42.03% vs. industry average at 35.91%. TTM operating margin at 14.91% vs. industry average at 8.88%. TTM pretax margin at 14.63% vs. industry average at 9.76%.

6. Flowserve Corp. (NYSE:FLS): Develops, manufactures, and sells precision engineered flow control equipment. Of the 8 analysts that have set a target price on the stock, the lowest price target stands at $105.0. This implies an upside of 31.25% from current levels around $80.0. TTM gross margin at 36.54% vs. industry average at 32.56%. TTM operating margin at 13.29% vs. industry average at 12.64%. TTM pretax margin at 13.23% vs. industry average at 10.99%.

7. CARBO Ceramics Inc. (NYSE:CRR): CARBO Ceramics Inc. manufactures and supplies ceramic proppants primarily used in the hydraulic fracturing of natural gas and oil wells in the United States and internationally. Of the 12 analysts that have set a target price on the stock, the lowest price target stands at $150.0. This implies an upside of 28.82% from current levels around $116.44. TTM gross margin at 45.66% vs. industry average at 34.75%. TTM operating margin at 29.24% vs. industry average at 17.86%. TTM pretax margin at 28.58% vs. industry average at 16.47%.

8. First Niagara Financial Group Inc. (NASDAQ:FNFG): Operates as the holding company for First Niagara Bank, N. Of the 8 analysts that have set a target price on the stock, the lowest price target stands at $12.0. This implies an upside of 27.52% from current levels around $9.41. TTM gross margin at 80.63% vs. industry average at 61.52%. TTM operating margin at 42.55% vs. industry average at 33.1%. TTM pretax margin at 20.% vs. industry average at 14.22%.

9. CEVA Inc. (NASDAQ:CEVA): CEVA, Inc. and its subsidiaries engage in designing and licensing silicon intellectual property (SIP) for the handsets, portable multimedia, and consumer electronics markets. Of the 8 analysts that have set a target price on the stock, the lowest price target stands at $32.0. This implies an upside of 27.44% from current levels around $25.11. TTM gross margin at 93.53% vs. industry average at 61.32%. TTM operating margin at 28.17% vs. industry average at 27.08%. TTM pretax margin at 32.42% vs. industry average at 27.03%.

10. Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR): Engages in the specialty coffee and coffee maker business. Of the 8 analysts that have set a target price on the stock, the lowest price target stands at $117.0. This implies an upside of 27.35% from current levels around $91.87. TTM gross margin at 37.12% vs. industry average at 34.43%. TTM operating margin at 14.13% vs. industry average at 12.66%. TTM pretax margin at 10.51% vs. industry average at 10.12%.

11. Comcast Corporation (NASDAQ:CMCSA): Provides entertainment, information, and communications products and services in the United States and internationally. Of the 23 analysts that have set a target price on the stock, the lowest price target stands at $28.0. This implies an upside of 26.75% from current levels around $22.09. TTM gross margin at 44.98% vs. industry average at 43.03%. TTM operating margin at 20.5% vs. industry average at 16.32%. TTM pretax margin at 15.71% vs. industry average at 12.15%.

12. Tenaris SA (NYSE:TS): Engages in the manufacture and sale of steel pipe products. Of the 14 analysts that have set a target price on the stock, the lowest price target stands at $35.0. This implies an upside of 25.94% from current levels around $27.79. TTM gross margin at 41.26% vs. industry average at 34.75%. TTM operating margin at 18.54% vs. industry average at 17.86%. TTM pretax margin at 19.76% vs. industry average at 16.47%.

13. Enersis S.A. (ENI): Engages in the generation, transmission, and distribution of electricity in Chile, Argentina, Brazil, Colombia, and Peru. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $22.0. This implies an upside of 25.64% from current levels around $17.51. TTM gross margin at 30.23% vs. industry average at 27.37%. TTM operating margin at 23.85% vs. industry average at 18.93%. TTM pretax margin at 20.46% vs. industry average at 14.47%.

14. Capital One Financial Corp. (NYSE:COF): Operates as the bank holding company for the Capital One Bank (NYSE:USA), National Association and Capital One, National Association, which provide various financial products and services in the United States, Canada, and the United Kingdom. Of the 20 analysts that have set a target price on the stock, the lowest price target stands at $51.0. This implies an upside of 25.55% from current levels around $40.62. TTM gross margin at 33.44% vs. industry average at 32.42%. TTM operating margin at 33.44% vs. industry average at 28.51%. TTM pretax margin at 26.72% vs. industry average at 23.92%.

15. Provident Financial Services, Inc. (NYSE:PFS): Operates as the holding company for The Provident Bank that provides banking services to individuals, families, and businesses in New Jersey. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $14.50. This implies an upside of 25.0% from current levels around $11.60. TTM gross margin at 67.77% vs. industry average at 61.52%. TTM operating margin at 34.88% vs. industry average at 33.1%. TTM pretax margin at 22.49% vs. industry average at 14.22%.

16. Dril-Quip, Inc. (NYSE:DRQ): Designs, manufactures, fabricates, inspects, assembles, tests, and markets engineered offshore drilling and production equipment for use in deepwater, harsh environment, and severe service applications worldwide. Of the 9 analysts that have set a target price on the stock, the lowest price target stands at $68.0. This implies an upside of 23.39% from current levels around $55.11. TTM gross margin at 45.73% vs. industry average at 34.73%. TTM operating margin at 24.19% vs. industry average at 17.83%. TTM pretax margin at 22.66% vs. industry average at 16.46%.

*Analyst target price data sourced from Thomson Financial, profitability data sourced from Fidelity.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.